Morkel, 33, cited family pressures following local media reports that he was set to take up a Kolpak contract to play in England.
"It was an extremely tough decision but I feel the time is right to start a new chapter. I have a young family and a foreign wife, and the current demanding international schedule has put a lot of strain us," Morkel said in a Cricket South Africa news release on Monday.
"I still feel there is a lot of cricket left in me and I am excited for what lies ahead. For now, all of my energy and focus is on helping the Proteas win the upcoming series against Australia."
Morkel will now be free to play in Twenty20 leagues around the world, although he went unsold in the recent auction for this year's Indian Premier League.
He played the first of his 83 tests against India in 2006 and has taken 294 wickets at an average of 28.08.
The tall seamer has also featured in 117 one-day internationals and 44 Twenty20 Internationals, taking 529 wickets across the three formats of the game.
(Reporting by Nick Said, editing by Ed Osmond)
